Green development is not only an aspiration, but also an imperative

Following the announcement of OCP Group’s recent green investment program (2023-2027) presented to HM King Mohammed VI, Larabi Jaidi, Economist and Senior Research Fellow at the New South Policy Center (PCNS), spoke to MAP, in which she discussed both resources provides first impressions of a program that is huge in terms of scope and unprecedented in Africa, demonstrating the Kingdom’s leadership and unwavering commitment to sustainable development.

Question: OCP Group is about to launch a new green investment program, how do you read this initiative?

This is a large program of financial mass that will be included in the national economy within four to five years. It is a continuation of the previous Plan by strengthening the already established options for the promotion of green manures and opens new perspectives for the development of renewable energy sectors related to phosphate recovery.

My first impression of this project is that it is an example of the ability of a country and its leading public companies to use its natural resource potential to diversify its economy and strengthen its strategic autonomy. The failure of development trajectories in many countries of the South with natural mineral or energy resources is largely explained by what is known as the natural resource curse.

This applies to African or Latin American countries rich in mineral or energy resources, living in paradoxical economic conditions characterized by the abundance of natural resources and the difficulty of developing this resource through the development of value chains that maximize its impact on national economies. .

Public monopolies that exploit these resources contribute to the reproduction of the structures of the rentier economy. The financial income obtained by the public company is paid to the state, which often spends it on unproductive consumption. Not to mention cases of rent capture by corrupt elites.

OCP’s investment program is an expression of the tenant-versus-model. It demonstrates that public decision-making is based on a long-term vision, anticipation of changes in the international environment, political voluntarism and a rational economic approach. The aim is to contribute to the diversification and integration of the national economy in order to provide sustainable benefits for the welfare of citizens.

Can we really pursue green development? How?

It’s not just a wish, it’s an imperative. Oil, gas and coal, which are expected to slowly disappear in favor of less polluting energy resources, are more than ever at the center of international tensions. Conversion is difficult when there is an addiction to abundant fossil fuels.

But renewables already provide an increasingly important part of the world’s energy mix. Despite the challenges outlined in the latest international climate negotiations, the long-term goal of moving towards carbon neutrality while respecting commitments outlined in Nationally Determined Contributions (NDCs) is binding on all partners.

This is a complex issue that requires decarbonizing all economic sectors of goods and services. The environmental emergency has never been more urgent, and sustainable development is an inevitable choice. If Morocco wants to gain a greater position in the international market for fertilizers, agricultural or industrial products, it cannot escape the problems of greening the structures of its economy.

The Kingdom reiterated its willingness to strengthen efforts already made at COP 27 in terms of harmonizing international sustainability commitments. The challenge is to mobilize financial and technical means for a development model that combines sustainability and innovation.

The goal is to realign and reinvigorate the potential of renewable energy programs to significantly reduce the overall cost of energy, leverage it for business competitiveness, and create the conditions for a low-carbon economy that is attractive for investment. high added value.

Restructuring the national economy on the basis of green economy principles by adopting both a global and an integrated special strategy is one of the main directions recommended by the New Development Model. This strategy should be rolled out at the territorial level and should be closely linked to sector strategies, giving priority to local capacity.

Special attention should be paid to the development of green industries in the fields of solar, wind energy, liquid sewage and waste management and their adaptation to the potential of the regions.

The program has huge socio-economic ambitions in terms of employment and supporting SMEs, what do you think will be its impact on the overall economic dynamics of the Kingdom?

The most important result for me is that it has a significant impact on the structures of the national economy. The program is about turning the energy constraint facing Morocco into a real development opportunity.

Above all, it seeks to benefit from the efforts made in the field of renewable energies (solar projects, wind energy, etc.) and takes into account the potential hidden by these energies by anchoring new technological solutions such as Power – – X.

Thus, it strengthens several promising sectors, such as wind energy, photovoltaic cells or even desalination, with a very significant degree of integration. The production of desalinated water for agricultural and non-agricultural purposes will reduce the pressures of agricultural activities on water resources and contribute to a better balance between food security and water conservation.

It then designs industrial energy projects within the framework of territorialized industrial integration. This program will enable the consolidation of the national industrial ecosystem with a 70% local integration rate and an announced benefit for 600 participating Moroccan companies. This will likely contribute to area development, with most projects located in areas where rock is mined or turned into fertilizer.

Finally, the program mobilizes natural resources, technology and innovation to produce green manure and at the same time strengthens the renewable energy sector to best respond to the challenges of new competitiveness issues. It helps create opportunities for high technology policy through investments in research and development activities.

As such, it allows for progressive technological adoption and diffusion that allows for the emergence of local expertise and content (products and services). Desalination should create conditions for capacity building between international and Moroccan operators and the creation of clusters for access to technologies in the value chain.

Solar farms planned in various parts of the country could support the development of the country’s nascent solar photovoltaic industry. Planned wind farms can attract specialized companies with the aim of producing the missing technological bricks locally.

In all these projects, there are opportunities to implement the public order of the OCP to promote industrial compensation, to expand the scope of subcontracting in industrial activities and services addressed to local SMEs and VSEs. This can take the form of contractual industrial integration clauses that bind universities and research institutes, start-ups and national companies to the project.

Could Morocco become a world leader in green hydrogen as well as fertilizers thanks to this new Program?

Hydrogen is at the center of new geostrategic challenges. This is one of the important elements of the international energy transition. In this field, there is a strong competition between the big countries that want to be world leaders.
The United States, the European Union, Japan or China multiply their programs and action plans and mobilize their financial and technological resources in this competition.

Closer to home, the European Union has implemented a hydrogen strategy supported by the Green Deal, where hydrogen has a large and important role to play, as it enables both the transport and storage of energy from renewable sources.

The hydrogen craze is global. It has long been presented as the energy form of tomorrow. Hydrogen and “Power-to-X” by-products open new paths for decarbonization in industries that are difficult to power down. This could be the oil of the second half of the 21st century. Of course, it is not a source of energy, but a vector like electricity. This form of energy is considered an important element of energy transition. Reducing our energy dependence and strategic autonomy in the field of energy are the main challenges. These goals are realistic. Obviously, they are difficult to achieve. There is a new economy to be built and ambition is needed.

Clean or green hydrogen sectors need to be built from the top down. The equilibrium paths of this trajectory will be difficult to manage. Given its current assets, Morocco should open up justified perspectives in the development of a sector serving the national industry, certified for green products (hydrogen, ammonia, etc.), sustainable and competitively priced. international attractiveness factor.

It has adopted a roadmap that aims to capitalize on its assets to gain a foothold in the budget-consuming hydrogen sector, which has not yet reached technological maturity. It should be remembered that the cost of energy prevails in the production of hydrogen by electrolysis of water.

Large-scale deployment of hydrogen requires the technological adoption of green energy-based production solutions, storage and backup. Morocco is trying to adopt a technological policy in this area and develop pilot projects with specialized partners in this area.

Playing in the big leagues requires partnership deals with major international players. In this perspective, the convergence of views of government bodies, OCP and the research world regarding the regimes and mechanisms of these partnerships will accelerate the process of mastering this strategic sector.

Interview by Zin Al Abidin Taimouri (MAP)

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